April 4, 2008

Synergy

Ten years ago this Sunday, on April 6, 1998, Sanford I. Weill rewrote the rules of Wall Street.

That day, at 7:41 in the morning, Mr. Weill unveiled the megamerger that created Citigroup, the biggest financial services company the world had ever seen. The deal — as daring and brazen as the man himself — tore up a crucial chapter of the legal canon that had guided American banking since the Depression.

The rest is history — but not the history that Citigroup hoped for. A decade later, Mr. Weill’s watershed deal is regarded by some as one of the worst mergers of all time.

Today, the behemoth formed by the union of Citicorp and Travelers seems to lumber from one crisis to another. Bloated costs, outmoded technology and political infighting have hobbled the giant company, which employs 374,000 people in more than 100 countries.

I’m kind of happy, in a kind of evil sort of way. First, it renews faith for me that we will not have an OmniCorp (see The Onion: Our Dumb Century). Second, it demonstrates an important principle: none of us is as dumb as all of us, that consolidation is not always “streamlined” or “efficient.” I’d say the end of the all-consuming corporate monolith is ending… at least I hope it is, ’cause it would be awfully nice.